The banks involved in the transaction include First Abu Dhabi Bank, Mashreq Bank, Bank of Jordan, and the Arab Bank of Bahrain.
Telecom Egypt has signed a financing agreement with 11 allied banks to obtain a $500m medium-term syndicated loan.
First Abu Dhabi Bank (FAB) and Mashreq Bank acted as joint coordinators, underwriters, bookrunners, and initial mandated lead arrangers of the loan, similar to the medium-term syndicated loan secured in October 2018.
FAB also acted as the facility agent for the transaction and Mashreq was the designated account bank and the documentation agent, while Ahli United Bank was an initial mandated lead arranger.
The mandated lead arrangers included Abu Dhabi Commercial Bank, National Bank of Kuwait, Arab Banking Corporation, Al Ahli Bank of Kuwait, Arab Bank PLC – Bahrain, and Europe Arab Bank. Moreover, the Bank of Jordan was a lead arranger, while Attijariwafa Bank acted as an arranger of the facility.
The new financing agreement reflects the confidence of the international banking sector in Telecom Egypts ability to continue its strong financial and operational performance over the coming years, as the new loan period extends to six years, which is not the general market norm for dollar loans whose duration does not exceed five years.
Adel Hamed, Managing Director and CEO of Telecom Egypt, said that the strong operational and financial performance exhibited during the last three years has boosted the confidence of respected international financial institutions in Telecom Egypt, enabling Telecom Egypt to, once again, secure a $500m syndicated loan with the loan being 2.7x oversubscribed.
The aim of the facility is to convert our short-term USD overdrafts into longer-term loans to enable the company to repay instalments in line with its cash flow generation. The restructuring of our leverage comes in line with our financing strategy, to deleverage over time, while enhancing our financing cost. We are confident that this facility, along with our growing organic performance and certainty on dividends from associates will translate into a greater cash flow flexibility for the company, he added.